Wednesday 21 August 2019

Bank Inquiry: too little, too late and too expensive

Was this the greatest waste of taxpayers' money since the boom

Teflon Taoiseach: Bertie Ahern was in his element as he fielded questions at the Banking Inquiry
Teflon Taoiseach: Bertie Ahern was in his element as he fielded questions at the Banking Inquiry
Ronald Quinlan

Ronald Quinlan

Amidst all the agonising and the arguing that has gone on among the members of the Banking Inquiry, the only thing we can be sure of at this stage is that the final report into the causes of Ireland's banking crisis will make for expensive as opposed to compulsive reading.

With the costs of the investigation set to run to €5m, a crude calculation shows that the final version of the disjointed and unusable 750- page draft presented by the inquiry's investigators to the committee will cost the taxpayer between €12,500 and €20,000 per page if estimates that the completed report will run to between 250 and 400 pages prove to be accurate.

Given those numbers, it's hardly surprising that individual members of the banking inquiry team have rushed to defend the value of the work they have been doing in the bowels of Leinster House in calling politicians, bankers, developers, civil servants and regulators to account in person for their actions in the years of the boom and the bust that followed.

But just what have those efforts at interrogation added to the findings of the comprehensive reports already presented by former IMF officials Klaus Regling and Max Watson in 2009, Central Bank governor Patrick Honohan in 2010 and Peter Nyberg in 2011?

Not a lot as it happens, once you strip out the fruitless 'whodunnit' posers about who said what to who in Government Buildings on the night of the 2008 bank guarantee, or whether or not Anglo Irish Bank was discussed by Brian Cowen and Sean FitzPatrick over a game of golf in Druid's Glen.

Even if there had been a smoking gun, reporting on its existence would have been difficult for the inquiry's members given the strict prohibition on apportioning blame to individuals set down in the Commission of Inquiry's terms of reference.

So what will the inquiry's final report amount to? Put simply it will reiterate the findings of the three previous analyses conducted by the aforementioned Messrs Regling and Watson, Honohan and Nyberg.

Without rehearsing their conclusions - which came at a time when the public was still exercised in relation to the causes of the country's economic collapse, all expertly exposed the failings by our political and regulatory systems and how those failings were exacerbated by global influences. Chief among these international factors was the ready availability of billions of euro in cheap and easy credit on the interbank lending market which our banks doled out with abandon in loans to developers and mortgage borrowers up until the collapse of Lehman Brothers in September 2008, an event which is credited with triggering the global financial crisis.

There is little in the way of substance that the members of the Banking Inquiry will be in a position to say, other than to reconfirm this.

Indeed, only last week the committee's members decided to dilute their own report further by removing references relating to the role of the media and the relationship between property developers and bankers from it.

Notwithstanding its own anticipated shortcomings, the report's publication is expected to allow for the release of 500,000 documents received by the inquiry from individual witnesses and bodies such as the Central Bank and Department of Finance in preparation for its hearings. This material may prove itself more useful to those with the time and the will to inspect its content with a view to reaching their own conclusions.

One unexpected outcome of the inquiry which won't have pleased Taoiseach Enda Kenny and his government as they bid for re-election is the manner in which it acted as a vehicle for former Taoisigh Brian Cowen and Bertie Ahern to restore their respective reputations

Such had been the anticipation within the Leinster House political and media bubble of Brian Cowen's two days before the Banking Inquiry, it was always going to be difficult for the reality to live up to the hype. Predictably, it didn't.

Indeed, by the time he came to conclude his evidence in the bowels of Leinster House, the mood of the former Taoiseach and Minister for Finance had lightened to the point where he appeared to be enjoying himself as the politicians tried in vain to elicit a confession as opposed to an explanation from him.

In terms of his responses, Cowen was on autopilot, reiterating the account he had already given in relation to his actions in office in a speech at Georgetown University in Washington DC in March 2012 and again in an interview with TG4 in September 2013.

Cowen's defence then and to the inquiry now was that everyone including the IMF had believed the Irish economy would experience a 'soft landing' and that very few commentators had warned of the looming crash.

The only hint of an inconsistency in Cowen's testimony came with the subsequent appearance of former Anglo Irish Bank non-executive director Gary McGann. In his evidence, Mr McGann disclosed that the former Taoiseach had met initially with Sean FitzPatrick and the rest of the Druid's Glen golf party in the home of Fintan Drury rather than on the golf course itself. While McGann stressed that the difficulties facing Anglo Irish Bank had not come up for discussion in Drury's home or on the golf course, the members of the inquiry refused to let the matter lie. Perhaps they saw it as an opportunity to finally land a decisive blow on Brian Cowen. In the event, it wasn't.

Had Bertie Ahern's appearance at the inquiry unfolded in line with the expectations and the wishes of Fianna Fail's opponents, the three-time former Taoiseach would have left Leinster House accepting full responsibility for Ireland's economic ruination.

That didn't happen. Rather, the members of the Banking Inquiry, media and the public who watched his evidence online and on Oireachtas television were given a reminder of Ahern's capacity - honed over years of dealing with Leaders' Questions in the Dail - to absorb, understand and debate the minutiae of complex issues.

And so the man once referred to by his political opponents and the media as the 'Teflon Taoiseach' for his extraordinary ability to navigate all manner of controversy and emerge unscathed was in his element as he fielded questions on his 11 years at the nation's helm.

Those members of the Leinster House political and media bubble who believed their expressions of distaste for Ahern arising from his dealings with the Mahon Tribunal and the public opprobrium it had fostered would be sufficient to render his evidence as meaningless were wrong.

Indeed, an early effort by Sinn Fein's Pearse Doherty to question the former Taoiseach on Fianna Fail's Galway Races tent and the party's fundraising amongst builders and developers was met with a swift and deft riposte. Doherty, for his part, was reminded that the construction company he had worked for during the boom had contributed to similar Fianna Fail fundraisers at the Listowel races.

As had been the case with Brian Cowen, Ahern was met with little in the way of effective resistance as he made his case that his governments had managed the economy prudently during the years of the boom.

The former Taoiseach pointed to a range of factors, including the year-on-year growth in GDP, the repeated recording of budgetary surpluses, reduction in the national debt, the multi-billion euro capital expenditure on the motorway network and the establishment of the National Pension Reserve Fund.

Sunday Independent

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